Pawlenty's speech puts focus on gambling
by Michael Khoo, Minnesota Public Radio
February 5, 2004

An artist's rendering of a racino, a proposed expansion at Canterbury Park which would house 2,000 video slot machines. (Image courtesy of Canterbury Park)

Gov. Pawlenty in his speech Thursday called for a re-examination of the 15-year-old gaming compacts that authorize the state's 11 American Indian tribes to operate casinos. The governor has long been an opponent of sanctioning new gambling facilities, but he's suggesting that a "better deal" could be negotiated with the tribes based on their current operations, perhaps one that requires them to share a portion of their gaming revenues with the state.

St. Paul, Minn. —
Efforts to capture tribal gambling revenues for the state have been percolating at the Capitol almost since the state negotiated the gaming compacts in the late 1980s and early '90s. Unlike most other states, the Minnesota compacts don't require any direct revenue sharing with the state, and have no expiration date. That's left many lawmakers frustrated, particularly in years when state budgets are tight. Pawlenty's thinking seems to have evolved in a similar direction.

"We need to recognize that times have changed. The compacts negotiated with the American Indian tribes almost 15 years ago do not reflect current circumstances. And we need to address the issue," Pawlenty says.

The governor said that he would prefer to keep gaming within "its current contours." But he followed that up by saying that within those contours, he would seek a better deal for Minnesotans. Republican House Speaker Steve Sviggum says that could mean the governor will ask tribes to begin sharing a portion of their profits with the state.

"I think that could be read into it -- renegotiation of the compact could be read into it," Sviggum says. "I think you could certainly read into it competitive gaming."

Sviggum is a recent convert to supporting new gaming initiatives. He argues that if the Native American tribes don't offer a share of their revenues, then the state should authorize non-tribal facilities. Those would compete with the existing casinos and generate dollars for the state.

In fact, House lawmakers last year approved the installation of slot machines at the Canterbury Park race track. The "racino" is projected to net $75 million a year for state coffers. The tribes vigorously oppose that plan.

John McCarthy is the executive director of the Minnesota Indian Gaming Association, which represents nine of the state's 11 tribes. He says Sviggum's racino advocacy is an effort to intimidate Native Americans into re-negotiating the compacts. McCarthy says it's unlikely the tribes will re-open the compacts per se, but he says they may be willing to discuss side agreements or add-ons. However, McCarthy says the tribes won't offer concessions without something in return.

I don't think in the next eight to 10, 12 weeks, that is an issue we can decide. It's too large, too complicated.- Senate DFL Leader Dean Johnson

"Any agreement or any discussions I think that the tribes would have, would have to involve something positive for the tribes, that they would benefit," McCarthy says. "That can be from monetary to regulatory. I don't know."

Because 2004 is the second half of the Legislature's two-year cycle, last year's House vote on racino still stands. That makes the DFL-controlled Senate the likely battleground for gaming initiatives.

Sen. Dick Day, R-Owatonna, is the top Republican in that body and one of the most vocal racino supporters. He says he's glad to see the governor show some movement on the gambling front. But he says he doesn't see what incentive the tribes have to compromise with the governor.

"I think he feels that he can sit down with all the tribes, put together some type of plan that they would say, OK, we'll give the state, I don't know, $100 million a year to have a monopoly for the next 20 years. And I think he's wrong. I don't think they're going to do that," says Day.

Day also says he's not optimistic about the racino bill's chances this year. Senate Democrats have traditionally been hostile to new gaming initiatives, and Majority Leader Dean Johnson says his caucus has little interest in creating new gambling opportunities. Johnson says it's unlikely new agreements between the state and the tribes will come together anytime soon.

"I don't think in the next eight to 10, 12 weeks, that is an issue we can decide. It's too large, too complicated, too many antennas in regard to the issue," says Johnson.

A gubernatorial spokeswoman confirms that Pawlenty has already had some preliminary discussion with Native American interests. But the governor's office isn't yet elaborating on what direction his agenda may take.